PPC’s cement operations ramped up in May 2020 post the Covid-19 restrictions imposed at the end of March 2020 across most of the jurisdictions in which the Group operates. Double-digit year-on-year growth of cement volumes in South Africa were experienced in June and July and have continued at a high rate in August and September. For these two months combined, PPC expects volume growth of more than 25% when compared to the prior year. The resumption of construction activities and the temporary effect of high activity in construction projects to catch up on the delivery of these projects have had a positive impact on the performance.
Given the inherent uncertainty of the current South African economic environment, the Company is cautious on the sustainability of strong cement volumes experienced and continues with the implementation of measures to reduce costs and increase cash generation from its operations.
Total borrowings in the South African operations have decreased by over R200 million as a result of the increased cash generation and these initiatives.
In the international subsidiaries, the businesses have been less affected by the Covid-19 pandemic. In aggregate, total cement volumes sold also showed double-digit growth comparing July 2020 with July 2019.
Strong sales volumes have continued in August and September 2020, with PPC Barnet (DRC) and PPC Zimbabwe experiencing approximately 25% sales volume growth respectively compared to the prior comparable period.
In Rwanda, CIMERWA expects August and September cement volumes sold to increase by approximately 10% compared to the same period last year. All markets of these international subsidiaries of PPC benefit from a good performance of the cement plants and healthy construction activities.
The increased sales volumes and the effect of the cost reduction and cash preservation measures have resulted in cash flows for the last few months showing a positive trajectory.